Where to Buy a Retirement Home for Under $600 a Month

The crash has created some nice deals for folks looking for a new place to spend their golden years.

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In Pictures: 10 Major Cities Where Buying Beats Renting

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For Americans looking to buy retirement property, the historic real estate crash has created all sorts of opportunities. Home prices in 20 major metropolitan areas have declined roughly 28 percent from their 2006 peaks. Meanwhile, government efforts to ramp up demand for homes have significantly reduced mortgage costs for borrowers. Thirty-year fixed mortgage rates stood at 4.37 percent for the week ending September 16, only slightly above the 39-year lows reached two weeks earlier. Taken together, lower home prices and cheap mortgage rates have made home buying much more affordable than just a few years ago. And given that real estate values in many traditional retirement spots—like Florida and Arizona—have fallen even harder than the national average, Americans who are ready to embark on the second half of their lives are in a particularly favorable position. To that end, U.S. News has compiled a list of 10 places where retirement home buyers can purchase property for less than $600 a month.

[In Pictures: Where to Buy A Retirement Home for Under $600 a Month.]

In putting together our list, we obtained median home price data from the National Association of Realtors for 159 metropolitan statistical areas throughout the country. After subtracting a 20 percent down payment, we plugged the remaining figure into a mortgage calculator using a 4.37 percent rate on a 30-year fixed mortgage. We then looked for places that would make desirable retirement destinations and whose monthly mortgage payments totaled less than $600. Please note that these monthly payments only reflect costs for mortgage principal and interest, which will represent the majority of a homeowner's monthly housing expenses. It does not, however, take into account expenses for taxes, insurance, and utilities, which can vary significantly from one place to another.

1. Phoenix: With more than 200 golf courses, many miles of outdoor trails, and all sorts of museums and art galleries, the Phoenix area has long been an attractive retirement destination. Home prices in Phoenix doubled from 2002 to 2006, but dropped 51 percent as the real estate bubble deflated. The bust, however, has helped make the area's real estate market more affordable for would-be retirement home buyers. The median home price in the Phoenix area stood at $145,000 in the second quarter of 2010, up 11 percent from a year earlier. Buyers that put 20 percent down—or $29,000—on a median-priced Phoenix home will have monthly payments of roughly $579 for mortgage principal and interest.

2. Las Vegas: Few American cities have seen home prices swing as wildly as they did in Las Vegas over the past 10 years. After nearly doubling from 2002 to 2006, real estate values in Sin City have since plummeted by 57 percent. But the area's glitzy casinos, abundant golf courses, and 320 days of sunshine a year continue to make life enjoyable for retirees. The median home price in the Las Vegas area was $142,000 in the second quarter of 2010, a slight increase from a year earlier. After making a 20 percent down payment—of $28,400—buyers will have monthly payments of $567 on a median priced home in the Las Vegas area.

3. San Antonio, Texas: This city has 300 days of sunshine a year, more than 50 golf courses, 21 distinct parks, and a calendar packed with festivals and events. History buffs can check out the Alamo, where Mexican and Texan troops staged their legendary battle in 1836, while art enthusiasts can visit one of the 63 local galleries. The median home price in San Antonio was $148,000 in the second quarter of 2010, a decline of roughly 3 percent from a year earlier. Buyers who put 20 percent down—or $29,600—on a median-priced San Antonio home will have monthly payments of roughly $591.

[In Pictures: 10 Great Places to Buy Homes for Less Than $800 a Month.]

4. Greenville, S.C.: Greenville is tucked into the foothills of South Carolina's lovely Blue Ridge Mountains. Its 39 parks, minor league baseball team, and 14-acre zoo make this city of 62,000 an attractive spot for active retirees. The median home price in Greenville increased 7 percent, to $150,000, from the second quarter of 2009 to the same period this year. After making a 20 percent down payment—of $30,000—buyers will have monthly payments of $599 for principal and interest on a median-priced home in Greenville.